Brokers News

IG Markets launches CFD trading on Facebook's stock before the IPO

Feb 24 2012 12:09:58 GMT
By
Stanimir Zhelev , ForexBrokerz.com Find me on Google+

In response to the announcement of Facebook's initial public offering (IPO), IG Markets has created a 'grey market' for its highly anticipated float.

 

The biggest technology IPO since Google's in 2004, the Facebook float has created a frenzy of interest in the market, with some analysts suggesting the company could be capitalised between US$75 and US$100 billion.
 
The 'grey market' is priced by IG Markets based on where its clients believe the market will trade once it lists on an exchange, and enables traders to trade CFDs* on Facebook's stock before it lists. All open positions will settle on Facebook's market capitalisation at the close of its first day of trade.
As with grey markets previously offered by IG Markets (some examples include the floats of Queensland Rail, Tatts group and Telstra), the level of the Facebook share CFDs will be driven by supply and demand. Consequently, it will be a good indicator of Facebook's final float valuation.
 
While the majority of speculators are optimistic, more cautious investors will be keenly monitoring the initial three months after the float when the social network company may be vulnerable to regulatory changes, changing market sentiment and competitor strength.
 
For traders who have an interest in Facebook and a view on the valuation at which it will float, IG Markets' grey market on the stock is available twenty-four hours a day through IG Markets' trading platform, PureDeal.
 
The level to which IG Markets' clients can trade will be the expected market capitalisation of the company as opposed to its share price. Clients can trade off a bid/offer spread based on their expectations for Facebook's closing market capitalisation at the end of the first trading day. While the top end of the expected IPO range is US$100 billion, clients are currently anticipating firm upside on the first day, with Tuesday's close (February 15 in Australia) suggesting a market capitalisation of US$116.5 billion.
It is also worth pointing out that IG Markets' clients will also be able to buy and sell Facebook shares on the secondary market as a CFD once the company has listed.
 
Head of IG Markets Asia Pacific, Tamas Szabo, commented, "given the widespread market interest in Facebook's IPO, it is with great pleasure that IG Markets offers this service to our clients. The flexibility of CFDs, along with 24-hour access to global markets made possible through online trading, make our grey market an excellent way to take advantage of the growing speculation over Facebook's impending float."
 
About Facebook
 
Created by Mark Zuckerberg, Facebook is the most widely-used social networking site on the internet with over 845 million global users.
 
Its 2011 revenue was US$3.71 billion, an 88% increase year-on-year, and total capitalisation on December 31, 2011 was US$2899 million. In 2011 Facebook also made US$1 billion in profit, 85% of which was acquired through advertising.
 
About IG Markets
 
IG Markets is Australia's number one CFD provider,** and  offers CFDs across a wide range of markets, including over 7,000 global share CFDs, indices, forex, commodities, options, binaries and more.
IG Markets advises that trading CFDs may not be suitable for everyone, since CFDs are a geared product and can result in losses that exceed an initial deposit, and that product disclosure statements are available from http://www.igmarkets.com.au
 
*A CFD is a contract that enables traders to speculate on the changing prices of financial instruments. CFDs on Facebook shares do not entitle traders to take physical ownership of shares in Facebook; they are a simply a vehicle through which traders can speculate on the expected value of Facebook's stock once it floats. 
** 40% of active CFD traders have an account with IG Markets - Investment Trends May 2011 Australia CFD Report.
TAGS: cfd  facebook  stock  ipo  ig markets 

More news about IG Markets

More Forex Brokers News

Gain Capital acquires City Index for $118 million

Oct 31 2014 16:35:37

Gain Capital acquisition of City Index creates global leader in online FX/CFD trading, with over 235,000 funded accounts, $1.2 billion in customer assets and $3.1 trillion in annual trading volume. Read more

EXNESS and WWF have joined forces to restore tiger and leopard population

Oct 28 2014 17:36:55

As part of projects to protect animals, EXNESS and WWF Russia have joined forces to restore the Persian leopard population in the Caucasus and the Siberian tiger population in central Sikhote-Alin. Read more

GO Markets launches physical gold trading through MetalDesk platform

Oct 27 2014 16:21:23

GO Markets, one of Australia's largest forex brokers, announced the launch of  physical Gold, Silver and Platinum trading. Variety of bars and coins including Canadian maple leaf, American buffalo, Australian kangaroo and Chinese panda 1oz gold coins is available at a single press of a button. Read more

FBS integrates SafeСharge payment solution

Oct 24 2014 04:46:37

FBS, a CRFIN registered forex broker, today announced that it has integrated the SafeСharge online  payment solution. Payments in USD and EUR through SafeСharge are available any time and are processed instantly. . Read more

Plus500 revenue up 181% in Q3

Oct 23 2014 13:52:38

Plus500's marketing machine has managed to deliver 14 850 new customers for Q3 with average user acquisition cost up to $1005 from $632 a year earlier.  Given the 138% growth in average revenue per user, this has been money well spent. Read more

Alpari trading volumes up 31% in September

Oct 22 2014 23:29:27

Alpari, a global forex broker with  London, New York, Tokyo and Shanghai, today announced trading volumes in excess of $217 billion for the month of September. Read more

Oanda reports record-breaking trading volumes and new client registrations

Oct 20 2014 12:50:21

After FXCM and Forex.com, it's Oanda's turn to announce record trading volumes in September. With October 3rd being the busiest trading day ever, the Toronto headquartered forex broker has every reason to believe that the current month will be even better. Read more

DMM FX Australia launches a unique binary options platform

Oct 20 2014 12:19:48

DMM FX Australia, a Japanese owned ASIC regulated broker, has announced the launch of its own binary options trading platform. Read more

Oanda shuts down Currensee social trading network

Oct 10 2014 10:03:38

Oanda, one of the largest US forex bokers, yesterday announced that will shut down Currensee, its social trading network. The announcement comes as a surprise given that forex giant acquired the copy-trading network just a year ago. Read more

Hirose UK lanches binary options trading app for Android

Oct 09 2014 10:11:00

Following the successful launch of binary options trading earlier this year,  the FCA regulated broker Hirose Financial UK has announced the launch of the launch of binary options trading app for Android. Read more